Stocks to buy: SBI, BEL, TVS Motor among 5 stocks Motilal Oswal's expert recommends buying; do you own any?

The Indian stock market underperformed most major markets in 2025 due to heavy foreign capital outflow, weak earnings, stretched valuations, and concerns over US tariffs. The Nifty 50 rose 10.5%, while the Sensex climbed by 9% in 2025.

However, experts are optimistic about the return potential of the domestic market in 2026 due to better earnings prospects and favourable growth-inflation dynamics.

"We have a positive outlook on Indian equities and believe that Indian markets are well poised to retrace the underperformance of CY25, supported by better earnings prospects, supportive domestic macros, and an improved geopolitical situation," said brokerage firm Motilal Oswal Financial Services.

"The prevalent concerns of lower nominal GDP materially affecting corporate profit growth appear overblown to us, as corporate earnings are influenced by multiple factors beyond broad economic growth, which possesses limited explanatory power for corporate earnings growth," the brokerage firm said.

The brokerage firm believes valuations are reasonable, with Nifty trading at 21.2 times, near its long-term average of 20.8 times, and any earnings growth pickup may help valuations expand.

Stocks to buy

Divya Agrawal, Research Analyst and Advisory (Fundamental), Wealth Management, Motilal Oswal Financial Services, recommends the following five stocks to buy for the long term. Let's take a look:

State Bank of India (SBI) | Previous close: ₹999.35 | Target price: ₹1,100

Agrawal highlighted that SBI continues to exhibit resilience and market leadership, backed by its diversified customer franchise, strong balance sheet and improving asset quality, with GNPA/NNPA at low levels and healthy momentum across retail, SME and corporate lending.

"Credit growth remains robust at nearly 13% YoY, with management guiding for 12–14% loan growth and NIMs above 3%, supported by structural efficiency initiatives such as Project Saral and a strong corporate pipeline of nearly ₹7 trillion," said Agrawal.

"With improving return ratios and confidence in the durability of core earnings, we expect FY27E RoA/RoE of nearly 1.1%/15.5%, underpinned by resilient operations and sustained long-term growth prospects," said Agrawal.

Bharat Electronics (BEL) | Previous close: ₹403.10 | Target price: ₹500

Agrawal highlighted that the Defence Acquisition Council (DAC) cleared proposals worth ₹79,000 crore to buy radars, radios, automatic take-off landing recording systems and other equipment for its army, navy and air force in Dec’25.

"BEL is well-positioned to capture orders for radar systems, drone detection, HF SDR communications equipment, GBMES, and the electronics portion of other systems," said Agrawal.

Management reaffirmed its long-term export strategy, targeting an increase from 3-4% of turnover to 5% over the next 2-3 years, eventually reaching 10% of total revenues, led by key programs such as QRSAM, Project Kusha, amongst others.

"We expect BEL to benefit from orders for next-generation corvettes, electronic warfare, follow-on orders for electronics for 97 Tejas Mk1A, loitering munition programs, and export opportunities. We expect sales/EBITDA/PAT CAGR of 18%/17%/17% over FY25–28," Agrawal said.

TVS Motor Company | Previous close: ₹3,855.25 | Target price: ₹4,159

Agrawal highlighted that TVS Motor continues to outperform the industry, with strong festive-season retail growth, sustained demand momentum aided by GST rate cuts, and sharp improvement in domestic market share across 2W and EV segments.

Export performance remains robust with broad-based growth across Africa and LATAM, while operating leverage and mix improvements are supporting gradual margin expansion.

"A healthy product launch pipeline underpins upgraded FY27 estimates, with revenue/EBITDA/PAT expected to grow at a CAGR of 21%/25%/29% over FY25–28E, supporting sustained return ratios," said Agrawal.

Max Financial Services | Previous close: ₹1,671.80 | Target price: ₹2,100

According to Agrawal, Max Financial maintains a better-than-industry APE growth trajectory. VNB margin witnessed a strong expansion owing to strong growth and a rise in the contribution of protection, non-par, and annuity businesses.

"The proprietary channel continues to drive growth across offline and online channels, while the bancassurance channel posted strong growth in non-Axis partnerships. The persistence trends improved across long-term cohorts," said Agrawal.

"We expect VNB margins to improve to 25%/26%/26.5% over FY26–FY28, driven by stronger persistency across long-term cohorts, reinforcing the quality of growth," Agrawal said.

Zydus Wellness | Previous close: ₹472 | Target price: ₹600

Zydus Wellness is a diversified health and nutrition company with leadership in several consumer wellness categories.

Agrawal highlighted that the company’s portfolio is aligned with global consumption megatrends.

"Unlike FMCG peers, which are facing user-addition constraints in several core categories, Zydus can leverage its portfolio to keep expanding its user base, particularly for youth and affluent consumers," said Agrawal.

"Zydus has one of the best risk-reward profiles among peers with a similar market cap (less than ₹150 billion). With 70% promoter holding, professional leadership, best corporate background, and presence in futuristic relevant categories, we expect 14% organic EBITDA CAGR and 36% consolidated EBITDA CAGR during FY25-28E," said Agrawal.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.